The agri-food giant Meiji, the supermarket chain Lawson, the cosmetics and household products group Kao... Announcements of increases in the cost of daily items have multiplied in recent months and are widely reported by the local media.

The next increase in the price of "Umaibo", popcorn bars very popular with Japanese children, in particular caused a stir at the end of January because the price of this delicacy had been stable since its launch in... 1979.

Since the 1990s the Japanese economy has been generally stagnant and alternates between periods of falling prices, or deflation, and phases of timid inflation, at best.

These "lost decades", as economists have dubbed them, "really forged a deflationary mindset" where consumers "expect wages and prices not to rise", reminds AFP Shigeto Nagai of Oxford Economics.

Also companies have "lost their pricing power: they are always afraid of losing market share if they start selling more expensively", adds this economist.

Cropped profits and "redflation"

Many local businesses thus prefer to absorb their additional costs rather than pass them on to their selling prices.

And the smaller they are and cultivate close relationships with their customers, the more difficult it is for them to make the leap.

"For now, I'm bearing the rising costs," Satoshi Okubo, who runs a family restaurant in Tokyo that sells udon noodles made from soft wheat flour, told AFP.

A tempura sales stand in Tokyo, March 9, 2022 Charly TRIBALLEAU AFP

"We've been doing this business for 70 years, I can't just pass these costs on to our customers, who we're extremely close to," he says, although he expects his profits to fall.

In order not to cut into their profitability too much, many Japanese food brands use "redflating": not touching the price of a product, but slightly reducing its unit quantity.

What irritate some consumers like Masayuki Iwasa, 45, who has been listing such cases since the beginning of 2020 on his site called “Neage” (price increases, in Japanese).

"There are companies that say frankly what they do and others do not. If they were transparent (about their price increases, editor's note), I think consumers would understand," said Mr. Iwasa, interviewed by the AFP.

Vicious circle

Another classic recipe of Japanese companies to avoid raising their prices: contain wages.

In the 2000s, major Japanese companies "converted many of their permanent contracts to temporary contracts that cost much less."

And for their remaining "employees for life", "raising salaries is the last thing the bosses want to do", according to Mr Nagai.

The "spring struggle" (shunto), Japan's annual wage negotiations, has long been combative in name only, with workers' unions prioritizing job protection over salary increases.

In the Shibuy shopping district in Tokyo, February 27, 2022 Charly TRIBALLEAU AFP

But the consequence of this strategy - wages that have been almost stagnant for 20 years in Japan - is curbing household consumption and thus preventing escape from the trap of deflation: a vicious circle.

While a strong wind of inflation has been blowing in the United States and Europe since last year, Japan was an exception: consumer prices (excluding fresh produce) there fell by 0.2% on average in 2021.

However, they have started to rise again slightly for six months and in February experienced their strongest growth in two years (+0.6% over one year), according to statistics published on Friday.

Inflation could reach 2% in the coming months, predict economists.

The Bank of Japan (BoJ), which has been chasing this target in vain for almost ten years, should not be happy about it.

Because this imported inflation and aggravated by the depreciation of the yen "will not be sustainable", due to still anemic household consumption, explains Mr. Nagai.

Beyond that, "we should rather worry about a new deflationary shock".

© 2022 AFP